Contractor

Quick Summary of Contractor

A person or business which provides goods or services to another entity under terms specified in a contract. Unlike an employee, a contractor does not work regularly for a company. also called independent contractor.

A contractor is a person or firm who provides a product or service under contract.

In modern useage, a contractor is often an individual under contract to work for an employer for a specified period at a specified rate of pay. They are considered self-employed and pay for their own benefits and self-employment taxes including Social Security and Medicare payments. Some may have their own firms or corporations. When their contract ends, their job is over. They receive no severance pay, no pension, or any other benefits.

Certain companies, most notably Microsoft, have recently had their contractor hiring practices challenged. Challengers maintain that people claiming to be self-employee contractors were in fact employees. That would require payment of employment taxes plus back payments for vacation, holidays, and other benefits routinely provided to employees. To avoid such challenges, employers are increasingly hiring temporaries who work for employment agencies. These temps are employees of the temp agency and cannot be construed to be employees of the temp agency’s client.

Examples of Contractor in a sentence

You should always try to hire a contractor with a good reputation so that you can trust he will finish on time.

The contractor gave us a quote of ten thousand dollars for our kitchen remodel to pay for the supplies to do the job and his labor.

I worked underneath a licensed contractor for a couple of years, but I was never taken on an official apprentice, so I could not count that as experience when applying for a new job.

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